Net income advanced to 1.22 billion euros ($1.6 billion)
from 492 million euros in the fourth quarter of 2011, the
Munich-based company said in an e-mailed statement today.
Allianz was expected to earn 1.15 billion euros, according to
the average estimate of 11 analysts in a Bloomberg survey.

“I am encouraged by our healthy growth in premiums,
especially by recoveries in key European markets,” Chief
Financial Officer Dieter Wemmer said in the statement. “This
development shows that we are an attractive risk partner.”

European insurers such as Allianz, Axa SA and Prudential
Plc benefited from higher prices for some of their products last
year after earnings in 2011 were hurt by record losses from
natural catastrophes. A recovery in financial markets also
helped bring an increase in investment income, outweighing the
impact of lower interest rates.

Operating profit in property and casualty insurance rose to
1.26 billion euros in the fourth quarter from 1.09 billion euros
a year earlier, beating the 941 million-euro median estimate of
11 analysts surveyed by Bloomberg. Gross written premiums
increased 4.7 percent in 2012 as a whole.

The company will propose paying a dividend of 4.50 euros a
share from last year’s profit, Diekmann said.

Profit Forecast

Allianz expects to have an operating profit of 9.2 billion
euros this year, plus or minus 500 million euros. Operating
profit was 9.5 billion euros last year, which matched a target
for more than 9 billion euros, the company said.

“I am confident that again in 2013 Allianz will maintain
its profitability,” Chief Executive Officer Michael Diekmann
said in the statement.

The firm had operating profit of 2.28 billion euros in the
fourth quarter alone compared with 2 billion euros in the same
period a year previously, it said.

“We are positively surprised by the relatively optimistic
outlook,” Thorsten Wenzel, an analyst with Frankfurt-based
DekaBank who recommends buying the shares, said in an e-mailed
report to clients. “The operating profit in the fourth quarter
was better than expected due to very strong results in property
and casualty and asset management while the quarterly result in
life and health was relatively weak.”

Net income in the whole of last year rose to 5.49 billion
euros from 2.8 billion euros in 2011, when Allianz booked 1.9
billion euros of non-operating impairments on Greek sovereign
debt and investments.

Allianz’s asset-management unit, comprised of Pimco and
Allianz Global Investors, reported operating profit rising to
917 million euros in the three months to December from 663
billion euros a year previously. Operating profit was expected
to be 770 million euros, the median estimate of 11 analysts
showed.

Profit in asset management in the year as a whole climbed
34 percent to 3 billion euros, it said.

Pimco Contribution

Total assets under management grew an annual 12 percent to
1.85 trillion euros at the end of December, with third-party
assets advancing to 1.44 trillion euros from 1.28 trillion euros
in 2011.

Pimco, which managed 1.23 trillion euros of assets from
third parties at the end of December, attracted 114 billion
euros in net new money from clients during last year. Allianz
Global Investors managed 178 billion euros of assets from third
parties down from 217 billion euros at the end of 2011 due to
changes in the structure of the company, Allianz said.

Property and casualty insurance claims and other costs as a
percentage of premiums, known as the combined ratio, fell to
95.4 percent in the fourth quarter from 97.6 percent a year
earlier. A level below 100 percent means an insurer’s claims and
costs are lower than premium income, giving it a profit from
underwriting.

Operating profit at Allianz’s life insurer was 486 million
euros in the fourth quarter compared with 519 million euros a
year ago. That missed the 697 million-euro median estimate of 11
analysts surveyed by Bloomberg.